Get the job done

Apr 13,2018

The job shortage is worsening under a government that vowed jobs were a priority. The March job data is further proof of how misguided the job and economic policies have been. The unemployment rate was 4.5 percent in March, the highest for the month in 17 years. The number of unemployed people reached over 1 million for the third straight month. The wholesale, retail, restaurant, lodging and agency sectors that mostly hire temporary and irregular workers shed 260,000 jobs over the last two months. Jobs paying the minimum wage were the first to go when the base shot up 16.4 percent in January. Shop owners are at the counters or serving at small diners and stores to save costs.

Ongoing restructuring in troubled manufacturing industries like automobiles and ships have worsened the job crisis. Industrial sites have stalled due to restructuring. Outside the capital, construction has slowed. The thinning working population is also ominous. The government may not be able to find an easy solution to cyclical or structural factors, but it can undo damaging policy. It can reasonably amend the minimum wage program.

Instead of fixing the problem, the government resorts to costly makeshift measures. The 3 trillion won ($2.8 billion) subsidy will relieve small employers for now, but it cannot last. The government has also vowed to pay for the income cut from the reduction in legal working hours. It has offered monthly allowances of 100,000 won to 400,000 won to workers for a year. It has again chosen easy financial compensation over a structural solution by allowing greater flexibility in the work schedule.

The government is using fiscal spending as the accelerator as the economy loses steam after the hike in the minimum wage and shortened work hours. A car’s engine would be wrecked if the driver stepped on the brake and gas pedal at the same time.
Experimental and forced policies can also weaken the market and raise its dependence on fiscal fuel.

The government called upon the legislature to immediately approve a supplementary budget to create jobs for young people following the poor March data. The government has also resorted to the bad habit of increasing the budget to make up for its poor policies. The Constitution mandates the budget outline of every fiscal year. But governments have expanded budgets in the middle of the year for years. Before it stretches the budget, the government must examine what it can do without extra fiscal spending. It must remove the heavy regulations and revitalize the service sector to generate decent and lasting jobs and income.